In an economy the autonomous investment is 60 and MPC is 0.8. If the equilibrium level of income is 400, then the autonomous consumption is 30. True or false. Justify your answer.

Hey Parichay,

Given:
I =60MPC=0.8Equilibrium level of Y=400C=30

We know that equilibrium is struck when Y = C + I
C+I= C+cY+I =30+0.8×400+60=410Y=400YC+I
Therefore, the above statement is false.

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